Some Bridgewater Listings Should Trigger an Audit!

April 30, 2013 By Leave a Comment
 

…an energy audit, that is. That’s a lot more than a piece of tax-time humor – it’s a growing trend that rising energy costs have made ever more practical.

A survey by Fannie Mae found that the cost of heating, cooling, and hot water is now the highest single cost of homeownership, second only to the cost of the loan on the property. When buyers are prowling through the Central New Jersey listings this season, the more savvy among them are beginning to look for a HERS number: its Home Energy Rating System audit score.

HERS was developed by the Residential Energy Services Network (RESNET). This score represents the foremost nationally recognized system for calculating energy efficiency. Even if a formal HERS audit hasn’t been conducted (local listings feature those that have), knowing how they calculate their findings gives buyers and sellers a conceptual basis for comparing prospective Central New Jersey property purchases. Items inspected include:

  • Building envelope features (windows, doors, insulation, ducts) and ages
  • Heating, cooling and ventilation equipment types, characteristics and ages
  • Appliance and lighting characteristics
  • Comfort complaints
  • Visible moisture issues
  • Visible health and safety issues

When a full HERS Index is calculated, the lower the score, the greater the home’s energy efficiency. According to RESNET, more than 1,100,000 homes now have a HERS score — including 40% of all new homes. It’s why more and more existing homeowners find that including a HERS score in their Central New Jersey listings adds a powerful competitive selling point.

Contact us if you would like help preparing a marketing package. It could one that features your own HERS score: if your home is energy efficient, that’s one audit we’ll want to volunteer for!

The DoorPath Team is the most comprehensive online source for Central New Jersey real estate information and services. Whether you are looking for the latest sales, trends or homes for sale in Somerset, Middlesex, Union or Hunterdon Counties in New Jersey, The DoorPath Team at Coldwell Banker Residential Brokerage has it all at your fingertips. Browse information regarding short sales, foreclosures, new construction, investment property, land sales or commercial locations throughout Central New Jersey plus much more at  www.DoorPath.com or call Elizabeth “Liz” Brain at 848-448-3132 or Michael “Mike” Downer  at 732-302-1771.

 

 
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4 Ways to Save on Closing Costs

August 14, 2012 By Leave a Comment
 

When buying a home, closing costs average about 3% of the purchase price — but could go as high as 5% to 6% in higher-tax areas. In addition, for most loans you must still come up with a down payment of at least 5%. But you can use the following strategies to reduce the pain:

Have the seller pay closing costs

You can ask the sellers to help with some or all of your closing costs. You even get a tax break for mortgage points the seller pays (each point is 1% of the loan amount).

Be careful, however. If the sellers have already cut their price from what they were originally asking, they may just tell you to take a hike if you ask for more. If the sellers won’t work with you and you don’t have enough cash for closing — but you can afford a larger mortgage — it may make sense to bump up the price you pay for the home and have the sellers use the extra money to cover the closing costs for you.

Note, there are built-in limits to a seller’s generosity: Freddie Mac and Fannie Mae allow sellers to pick up closing costs worth 6% of the purchase price for loans with 10% or more down; the Federal Housing Administration allows up to 6%; and the Department of Veterans Affairs allows 4%.

Shop loan terms

The “no-cost” mortgage, which rolled most closing costs into your interest rate, has largely disappeared, and lenders have resurrected fees for everything.

Charges vary dramatically, so it pays to shop around and negotiate on all the loan terms, not just the rate. Borrowers have regained muscle as the market has become more competitive.

Call three or four lenders for their best rates (preferably without points) and an estimate of their fees (excluding third-party charges and escrowed amounts for taxes and insurance). Apply with the lender that’s offering the best deal to get a good-faith estimate. If you’re willing to pay more than one application fee, get two estimates and play the lenders against one another. If you’re refinancing, your current lender may offer a discount on fees.

Pay less for PMI

If your stake in a home is less than 20%, you must ante up for private mortgage insurance. Monthly premiums for PMI typically cost 0.5% to 1.5% of your loan amount per year, depending on how much equity you have, your credit scores and whether you get a fixed or adjustable-rate loan.

You could negotiate with the seller to pay a single premium upfront, or you could roll that single premium into your loan.

The DoorPath Team is the most comprehensive online source for Central New Jersey  real estate information. Whether you are looking for the latest sales, trends or homes for sale in Somerset, Middlesex Union or Hunterdon Counties in New Jersey, The DoorPath Team at Coldwell Banker Residential Brokerage has it all at your fingertips. Browse information regarding short sales, foreclosures, new construction, investment property, land sales or commercial locations throughout Central New Jersey plus much more at  www.DoorPath.com or call us at 908-658-9000 x 159 or cell at 732-302-1771.

 

 
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A Short Sale or Foreclosure – Which is best for your situation?

July 30, 2012 By Leave a Comment
 

Many people on the brink of foreclosure have been asking the question, “is it better to let the bank foreclose on my home, or should we try to get a short sale instead?”

There is no hard and fast answer to this question, but here’s the basic difference:

On a short sale, basically you sell the house for less than what the mortgage is worth and the lender forgives the difference.

The problem is that your FICO score will drop about as much as it would with a foreclosure.

But that doesn’t mean you can’t ever take out another mortgage. In fact, you may be eligible to buy a home with a loan backed by Fannie Mae or Freddie Mac more quickly with a short sale than you would if your home went into foreclosure. Lenders generally try to encourage short sales instead of foreclosures since they cost less for everyone involved.

If you would like more information about the advantages of one program over the other please give us a call at 732-302-1771 or drop us an email at mike@mikedowner.com and we can get you more information.

 
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3 Ways to Save on Closing Costs

July 14, 2012 By Leave a Comment
 

When buying a home, closing costs average about 3% of the purchase price — but could go as high as 5% to 6% in higher-tax areas. In addition, for most loans you must still come up with a down payment of at least 5%. But you can use the following strategies to reduce the pain:

Have the seller pay closing costs

You can ask the sellers to help with some or all of your closing costs. You even get a tax break for mortgage points the seller pays (each point is 1% of the loan amount).

Be careful, however. If the sellers have already cut their price from what they were originally asking, they may just tell you to take a hike if you ask for more. If the sellers won’t work with you and you don’t have enough cash for closing — but you can afford a larger mortgage — it may make sense to bump up the price you pay for the home and have the sellers use the extra money to cover the closing costs for you.

Note, there are built-in limits to a seller’s generosity: Freddie Mac and Fannie Mae allow sellers to pick up closing costs worth 6% of the purchase price for loans with 10% or more down; the Federal Housing Administration allows up to 6%; and the Department of Veterans Affairs allows 4%.

Shop loan terms

The “no-cost” mortgage, which rolled most closing costs into your interest rate, has largely disappeared, and lenders have resurrected fees for everything.

Charges vary dramatically, so it pays to shop around and negotiate on all the loan terms, not just the rate. Borrowers have regained muscle as the market has become more competitive.

Call three or four lenders for their best rates (preferably without points) and an estimate of their fees (excluding third-party charges and escrowed amounts for taxes and insurance). Apply with the lender that’s offering the best deal to get a good-faith estimate. If you’re willing to pay more than one application fee, get two estimates and play the lenders against one another. If you’re refinancing, your current lender may offer a discount on fees.

Pay less for PMI

If your stake in a home is less than 20%, you must ante up for private mortgage insurance. Monthly premiums for PMI typically cost 0.5% to 1.5% of your loan amount per year, depending on how much equity you have, your credit scores and whether you get a fixed or adjustable-rate loan.

You could negotiate with the seller to pay a single premium upfront, or you could roll that single premium into your loan.

If you would like more information about closing costs and how to save money on your next home please give us a call at 732-302-1771 or email us at mike@mikedowner.com.

 
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Higher Bridgewater Home Prices Expected by Consumers

June 12, 2012 By Leave a Comment
 

Higher Bridgewater home prices are expected by 33 percent of consumers over the next year. Fannie Mae’s March housing survey indicated 5 percent more people expect Bridgewater home prices to increase this month over the 27 percent surveyed last month who thought prices would increase this year.

 

Nearly half of consumers expect higher rental prices as well, the highest number registered by Fannie Mae since its monthly tracking began in June 2010. Americans’ rental price expectations for the next year continue to rise, reaching their record high level for the Fannie Mae survey this month.

 

The percentage of respondents who say it is a good time to buy rose by three points to 73 percent, the highest level in more than a year, while the percentage of respondents who say it is a good time to sell rose one point to 14 percent this month.

 

Consumers’ confidence about their own finances is stabilizing, with 44 percent expecting an improvement over the next year.

 

Higher Mortgage Rates Expected

There is an increasing share of consumers expecting both higher mortgage rates and Bridgewater home prices over the next 12 months.

 

Doug Duncan, vice president and chief economist of Fannie Mae says, “Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month.”

 

Duncan says, “Some may feel that renting is becoming more costly and that home ownership is a more compelling housing choice. Conditions are coming together to encourage people to want to buy homes.”

 

While the “sales of existing homes in January and February marked the strongest start to a year since 2007,” according to the combined Housing and Urban Development (HUD)/Treasury statement. “Data on home prices changed little from the previous month – marking a fifth month of seasonal lows.”

 

For further Fannie Mae survey findings, visit the Fannie Mae Monthly National Housing site.  http://fanniemae.com/portal/research-and-analysis/housing-monthly.html

 
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Consumers Expect Bridgewater Home Prices to Rise

May 11, 2012 By Leave a Comment
 

Higher Bridgewater home prices are expected by 33 percent of consumers over the next year. Fannie Mae’s March housing survey indicated 5 percent more people expect Bridgewater home prices to increase this month over the 27 percent surveyed last month who thought prices would increase this year.

Nearly half of consumers expect higher rental prices as well, the highest number registered by Fannie Mae since its monthly tracking began in June 2010. Americans’ rental price expectations for the next year continue to rise, reaching their record high level for the Fannie Mae survey this month.

The percentage of respondents who say it is a good time to buy rose by three points to 73 percent, the highest level in more than a year, while the percentage of respondents who say it is a good time to sell rose one point to 14 percent this month.

Consumers’ confidence about their own finances is stabilizing, with 44 percent expecting an improvement over the next year.

Higher Mortgage Rates Expected

There is an increasing share of consumers expecting both higher mortgage rates and higher Bridgewater home prices over the next 12 months.

Doug Duncan, vice president and chief economist of Fannie Mae says, “Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month.”

Duncan says, “Some may feel that renting is becoming more costly and that home ownership is a more compelling housing choice. Conditions are coming together to encourage people to want to buy homes.”

While the “sales of existing homes in January and February marked the strongest start to a year since 2007,” according to the combined Housing and Urban Development (HUD)/Treasury statement. “Data on home prices changed little from the previous month – marking a fifth month of seasonal lows.”

For further Fannie Mae survey findings, visit the Fannie Mae Monthly National Housing site at http://fanniemae.com/portal/research-and-analysis/housing-monthly.html or to search for Bridgewater homes visit us at www.ColdwellBankerBridgewater.com.

 

 
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Good News for Real Estate Short Sales

May 10, 2012 By Leave a Comment
 

Fannie Mae and Freddie Mac will require loan servicers who need more than 30 days to make a decision on a short-sale offer to provide weekly status updates and give a thumbs-up or thumbs-down no later than 60 days after receiving an offer.  Currently banks are taking up to a year or more to let sellers and buyers know of the decision.

Starting in June the guidelines will be in effect according to Fannie and Freddie’s regulator, the Federal Housing Finance Agency.  The goal of the program is to assist home owners in avoiding foreclosure.

FHFA said it expects additional changes to be in place by the end of the year that address borrower eligibility and evaluation, documentation simplification, property valuation, fraud mitigation, payments to subordinate lien holders, and mortgage insurance.

Freddie Mac issued more specifics on its new short-sale timeline, which applies not only to offers on properties in Freddie Mac’s traditional short-sale program, but to requests from borrowers to be considered for a short sale or deed-in-lieu of foreclosure under the Home Affordable Foreclosures Alternatives (HAFA) program.

Although Freddie Mac expects loan servicers to make a decision within 30 days, it recognizes that servicers may need more time to obtain a broker price opinion or approval from a private mortgage insurer before accepting a short-sale offer or approving a HAFA borrower response package (BRP).

If a loan servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.

Freddie Mac, which completed 45,623 short sales last year, said the new requirements are the latest step to comply with direction from the FHFA to set consistent servicing and delinquency management requirements.

“Short sales are more complex than routine home sales since they may involve multiple parties and long-distance negotiating,” said Tracy Mooney, Freddie Mac senior vice president, single-family servicing and REO, in a statement. “Freddie Mac’s new timelines are intended to help make the decision process more transparent and timely for short sales under the Obama administration’s HAFA program or Freddie Mac’s traditional short-sale option.”

Last week, Bank of America announced it cut decision times on short-sale offers to no more than 20 days, down from 45 days or longer. If offers fall through, agents have five days instead of 14 days to submit a backup offer.

All of these changes are long overdue and are of great benefit to the Somerset County Housing Market.  If you would like more information about the new guidelines or a list of potential short sales in Central New Jersey just drop us a line at mike@mikedowner.com with the word GUIDELINES in the subject line.

 

 
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Bridgewater Home Buyers Need Higher FICO Scores to Qualify

April 23, 2012 By 5 Comments
 

Bridgewater home buyers need higher and higher FICO scores these days in order to qualify for a mortgage. Very few Bridgewater home buyers sporting credit scores below 620 are able to obtain loans, but on the bright side, more are putting down less than 20 percent.

According to the February Realtor Confidence survey conducted by the National Association of Realtors, the percentage of home buyers putting less than the standard 20 percent down payment amount is at the lowest level in nearly a year.

The same survey found that prospective Bridgewater home buyers had difficulty qualifying for a mortgage. A comparison of FICO scores for transactions as reported by Realtors responding to the survey compared with FICO scores reported by Fannie Mae’s “Acquisition Profile by Key Product Features” shows that credit availability to lower scoring applicants seems to have declined since the Fannie Mae data in 2001-2004.

For those Bridgewater home buyers with good credit and access to programs like FHA, down payment requirements are lessening. Approximately 64 percent of buyers with a mortgage are putting down less than 11 percent, according to the survey.

Very few Realtors responding to the survey said prospective home buyers with FICO scores below 620 were able to obtain a mortgage. The same group said approximately 15 percent of those with FICO scores between 660 and 700 were able to get a mortgage, compared to 18 percent in the Fannie Mae data.

It pays for Bridgewater home buyers to find out what their FICO score is before they even begin to look for a home. If there are items in your credit score that can be corrected upward, that takes time. It’s better to get the scores up before you apply for a mortgage, rather than find the home of your dreams and then find out your score is too low to qualify.

If you would like information on how to increase your credit score, find out your credit score or fix errors on your credit score please drop us a line at mike@mikedowner.com.

 
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